HILTON HEAD — A bill designed to level the playing field for consumers shopping for the best wind insurance rates is headed to the S.C. House.
The bill, sponsored by state Sen. Tom Davis, R-Beaufort, passed the state Senate on Wednesday and will be taken up after the Legislature’s furlough next week, according to Davis.
One provision of the bill is doubling the amount dedicated to a program that helps some homeowners lower the cost of their insurance. The S.C. Safe Home program, created in 2007, offers about $1.5 million in grants for people with homes valued at $300,000 or less to weatherize their property and, thereby, lower their premiums, Davis said.
The amount available for grants would increase to more than $3 million under the new bill, he added.
The program is paid for by a tax charged to insurance companies on premiums they collect. The bill would not raise the tax, Davis said; rather, it would increase to 2 percent from 1 percent the amount of collections dedicated to the Safe Home program. The remainder could continue to go into the state’s general fund.
“A lot of people have seen their insurance premiums rise, and it’s really pinching them,” Davis said. “But a lot of lower- or middle-income people can’t afford to make the repairs insurance companies want done to lower premiums.”
The bill also would require the S.C. Department of Insurance to develop a hurricane model based on weather data specific to South Carolina, according to Andy Twisdale, a Hilton Head Island real estate agent who helped Davis and a group of local businesspeople craft the bill.
Insurance companies use models to estimate the losses that they could incur should a catastrophe, such as a hurricane, devastate the area. However, insurers currently use a model based on data specific to Florida, which is statistically more likely to be hit by such a storm, Twisdale said.
That data doesn’t take into account South Carolina’s concave coastline and location relative to the Gulf Stream that help spare it from most direct hits from major storms, Twisdale said.
Beaufort County has had eight hurricane strikes in the past 120 years, only one of which – Hurricane Gracie in 1960 – was classified as a major storm when it made landfall, according to data compiled by Daryl Ferguson, a retired Beaufort resident who collected statistics on the coast’s high home insurance rates.
As such, the risk factor “should be substantially lower because those mitigating factors will be included in the model,” Davis said.
The bill also would require the state Insurance Department to expand its market-assistance program by creating a more comprehensive online guide to help consumers understand available rates, he added.
“Insurance is a very intimidating area for homeowners,” Davis said. “Companies’ sales people understand the jargon, exclusions, deductibles. (Homeowners) don’t feel like they have the information and ability to shop their policy and get a better deal.”
Insurance companies also would be required to attend annual public hearings with the state insurance commissioner to compare premiums collected with losses paid out, Davis said.